* Gold rises for 4th session, up over 5 pct this week
* Bernanke re-affirms easy policy stance
* One-month GOFO remains in negative territory, tightness
* Coming up: U.S. producer price index Friday
(New throughout, updates prices, analyst comment, adds NEW YORK
dateline, second byline, table)
By Frank Tang and Clara Denina
NEW YORK/LONDON, July 11 Gold rose 1.3 percent
to a near three-week high on Thursday, within striking distance
to $1,300 an ounce, as investors flocked to the bullion market
as a hedge after U.S. Federal Reserve Chairman Ben Bernanke
reasserted that monetary stimulus will stay for some time.
Bullion extended its winning streak to a fourth straight day
after Bernanke on Wednesday told an economic conference in
Cambridge, Massachusetts that a "highly accommodative policy is
needed for the foreseeable future."
Bernanke's comment, which sparked a Wall Street rally and
losses in the dollar, came after minutes of the Fed's June
meeting showed many officials wanted more reassurance the job
market was on solid ground before withdrawing economic stimulus.
"Investors prefer to focus on the probability that
the Fed will remain easier for far longer," said Edward Meir,
metals analyst at INTL FCStone.
Prior to Wednesday, economists had expected the U.S. central
bank might begin to scale back its $85 billion in monthly bond
purchases in September.
Spot gold climbed as much as 2.7 percent to
$1,298.36, its highest since June 24. It was last traded up 1.4
percent to $1,281.40 an ounce by 2:00 p.m. EDT (1800 GMT).
U.S. Comex gold futures settled up $32.50 at
$1,279.90, with trading volume at 225,000 lots, above 10 percent
above its 30-day average, preliminary Reuters data showed.
Gold is still down 23 percent this year after taking a
beating following Bernanke's comments in May and June that the
Fed could begin scaling down its bond purchases later this year.
Copper jumped about 3 percent to a near one-month
highs, while U.S. crude futures retreated after the
previous day's rally but hovered near multi-month highs.
PHYSICAL SUPPLY TIGHTNESS
The cost of borrowing gold stayed near its highest level
since January 2009, reflecting dwindling supplies from bullion
banks after heavy liquidation and resilient demand for physical
On Tuesday, the Gold Forward Offered Rates (GOFO), rates at
which bullion banks are prepared to lend gold on a swap against
U.S. dollars, remained in the negative territory at -0.05
percent, suggesting possible near-term supply tightness.
However, investor sentiment remained guarded. Holdings of
the world's largest gold-backed exchange-traded fund, SPDR Gold
Trust, fell 0.1 percent to 30.192 million ounces on
Wednesday, hitting fresh lows since February 2009.
Gold's strength also pushed silver to a three-week
high of $20.26 an ounce. It was last up 3.6 percent at $20.02.
Platinum rose 2.3 percent to $1,403.24, while palladium
edged up 0.3 percent to 714.97 an ounce, respectively.
2:00 PM EDT LAST/ NET PCT LOW HIGH CURRENT
SETTLE CHNG CHNG VOL
US Gold AUG 1279.90 32.50 2.6 1262.10 1297.20 188,626
US Silver SEP 19.956 0.791 4.1 19.430 20.250 48,390
US Plat OCT 1407.60 39.50 2.9 1376.20 1413.50 9,604
US Pall SEP 718.20 4.40 0.6 715.20 731.85 3,870
Gold 1281.40 17.76 1.4 1264.41 1298.36
Silver 20.020 0.690 3.6 19.430 20.260
Platinum 1403.24 31.24 2.3 1381.00 1409.50
Palladium 714.97 2.47 0.3 718.02 728.50
TOTAL MARKET VOLUME 30-D ATM VOLATILITY
CURRENT 30D AVG 250D AVG CURRENT CHG
US Gold 225,681 198,136 182,100 23.97 -1.21
US Silver 53,493 66,706 56,312 33.08 -1.04
US Platinum 9,900 16,566 13,039 26.16 -1.57
US Palladium 3,888 4,512 5,526
(Additional reporting by A. Ananthalakshmi in Singapore;
Editing by Marguerita Choy)